I’ve got plenty of good news for investors looking for top-tier Canadian dividend stocks. There are a myriad of options to choose from, in a range of diverse sectors that allow for diversification opportunities for those seeking to create truly diversified income streams over time.
In this article, I’m going to dive into two top Canadian dividend stocks I think could be best-positioned to surge over time, and why these companies’ yields may be better options than bonds and other fixed income securities for those looking to really take advantage of higher yields in this current environment.
Let’s dive in!
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Fortis
It should be no surprise to most readers that Fortis (TSX: FTS) kicks off my list of top TSX dividend stocks to buy right now.
That’s not only because of the company’s current dividend yield of 3.6%. Rather, I think Fortis’s dividend-growth track record is one that’s truly unmatched, even in a market filled with so many great options for investors to choose from. With more than five consecutive decades of dividend increases over time, Fortis has become a dividend knight many investors look to for consistent and reliable income growth over time.
That said, I think the company’s underlying business model as a leading North American utility provider feeds as much into the narrative with this stock as anything else. Given our insatiable demand for energy and the expected increase in electricity and natural gas usage resulting from surging demand for artificial intelligence and other technologies, this is a stock with a very long and extended growth runway that I think is worth considering on that front as well.
As investors will note from the chart above, there is clearly a plethora of investors who agree with me. Fortis remains my number one dividend stock pick for long-term investors looking for both yield and growth in this current environment.
Toronto-Dominion Bank
Outside of major recessions and other financial crises, which require regulators to push pause on the ability for Canadian banks to raise their dividends, Toronto-Dominion Bank (TSX: TD) has one of the most incredible dividend-growth track records in the Canadian market.
That’s one of the reasons why I like this 4.1%-yielding Canadian bank. That’s to say nothing of the stock chart above, which highlights just how powerful a capital appreciation engine this stock has been over time.
For long-term investors, Canadian banks are among the go-to investments for portfolio stability and consistent growth over time. In addition to TD’s impressive yield, this is a stock that’s compounded like few others over many decades. Thus, from a total return perspective, finding stocks that can provide very consistent double-digit returns annually, like TD, is really something that’s hard to do.
In essence, both TD and Fortis are companies I’d consider both dividend stocks as well as long-term capital-appreciation opportunities. That’s why I like these stocks. And until these companies stop raising their dividends each and every year (that time may come), these are companies I think investors should at least consider right now.
